The Keynesian analysis of aggregate demand indicates that changes in the money supply
Have no effect on aggregate demand
Shift the aggregate demand curve in the opposite direction of the change in government spending
Shift the aggregate demand curve in the same direction as the change in government spending
Move the economy along the aggregate demand curve rather than shifting it
In the equation C = a + bY, which describes the aggregate consumption function, 'b' stands for?
The marginal propensity to consume
The amount of income when consumption is zero
The amount of consumption when income is zero
The average consumption level
The aggregate demand curve is downward sloping because
A lower price level, holding the nominal quantity of money constant, leads to a larger quantity of money in real terms causes the interest rate to fall, and stimulates planned investment spending
A lower price level, holding the nominal quantity of money constant leads t a larger quantity of money in real terms, causes the interest rate to fall, and stimulates planned investment spending
A higher price level, holding the nominal quantity of money constant
A higher price level holding the nominal quantity of money change
Aggregate demand is the total demand for all goods and services in an economy from
All sectors including the rest of the world
The household sector
The household and government sectors
Keynes assumed the situation of
Full employment
Under employment
Involuntary unemployment
Marginal unemployment
To explain the simple theory of income determination, Keynes used
Consumption and Investment
Aggregate demand and aggregate supply
Production and Expenditure
All the above
Aggregate supply is the total amount
Produced by the government
Of goods and services produced in an economy
Of labour supplied by all households
Of products produced by a given industry
As the MPS increases, the multiplier will:
Decrease
Increase
Either increase or decrease depending on the size of the change in investment
Remain constant
The Classical Theory assumed the existence of
Unemployment
Disguised unemployment
Under-employment
The accelerator theory of investment says that induced investment is determined by:
The rate of change of national income
The level of aggregate demand
Expectations
The level of national income
